It would be nice if the WSJ confirmed that $4.6B figure with Apple. Samsung provided data on operating profit by segment but I don't seeit anywhere in Apple's 10Q. If Apple is not providing that information how is Strategy Analytics arriving at it?

4:15 pm July 26, 2013

nicholas wrote:

Samsung got more profit? Im sure they did- they sold more crappy units. Not a fan boy- I would rather not have to be tethered to a phone but when I do... I use Dos equis... i mean Apple. Its a better product. nuff said. Samsung is the same crap that has been rollin out of Korea for sometime. Dont get fooled by the young hipsters using them in sexy sassy ways. plastic POS

4:18 pm July 26, 2013

rick wrote:

This is stupid. Of course Samsung would have higher profits. There new flagship phone the S4 just came out in the quarter in question. While Apple's flagship phone is almost a year old. What about showing up a trailing 12 month profit?

4:21 pm July 26, 2013

Sam wrote:

Apple seems to be pretty lax about the way it goes about doing business. They run their business at a snail’s pace. Squirting out a single product every once in a long while. But then again Samsung makes every company look rather lax when it comes to pushing products on consumers. Although Samsung’s methods might not be sustainable, it always looks like the company is trying hard. Samsung investors are only interested in super-high sales and they’ve already ditched Samsung even though Samsung did a fairly decent job in sales. Those investors must dream up numbers that can’t possibly be met. I guess even Samsung shareholders are capable of getting screwed over by the KOSDAQ hedge funds.

A line from a video at the recent WWDC: “If everyone is busy making everything, how can anyone perfect anything?”
This is obviously directed at Samsung more than any other company.
Samsung uses the shotgun approach to product development. They “squirt” every conceivable combination and variation of a product that can be imagined… And some people have been wrongly calling this “innovation”.
The problem with wasting resources designing, developing, producing, and marketing, as many product variations as quickly as possible is that no single product gets the attention to detail and quality that it should receive.
This is the problem with Samsung’s smartphones and tablets. The quality level is sub-par compared to its competitors’ products.
Samsung can be compared to General Motors in the 1950′s and 60′s. Many models of cars were produced each year, and each year the design changed giving consumers the false impression that this year’s model was better than last year’s.
Apple can be compared to BMW, whose cars don’t change design radically or quickly, but the quality and attention to detail is unsurpassed (primarily because the company’s resources are focused on those areas rather than on making design changes as quickly as possible.
General Motors was highly successful with its “totally new car every year” strategy, but that success crumbled eventually when consumers started buying other cars that were higher quality and more efficient than the cars GM sold.
If you ever wonder why the iPhone has consistently had higher quality and customer satisfaction ratings than any other phone, and why iPhone owners are much more likely to buy another iPhone in the future than users of other phones would repeat their purchase choices, it’s because Apple’s product development and production has a very different focus than those of competitors.

If by “margins” you mean sales numbers, we have recently learned that Samsung’s sales figures for the S4 are much lower than they have reported. This is not the first time that Samsung has over-reported sales for their products.
From a Reuters article titled “Samsung analysts ask hard questions as S4 marketing charm wears off”:
“Woori Investment & Securities, one of South Korea’s largest securities firms, cut its outlook for Samsung’s earnings and target share price on June 5. It was the first to adjust its view.
A massive wave of downgrades has since followed, with forecasters including JPMorgan, Morgan Stanley and Goldman Sachs taking a harder look at their assumptions of how well the S4, Samsung’s latest Galaxy smartphone, would actually do.
Sales estimates for the S4 were slashed by as much as 30 percent, stirring investor concerns over Samsung’s mobile devices division – the company’s biggest profit generator.”
Previously, Samsung reported that 10 million S4′s “shipped” in the first month. This is the amount of S4′s that Samsung claims to have received orders for from resellers…. It is NOT the number of S4′s that were actually sold to end users, which as we’ve seen from the past, has been substantially lower than the number “shipped”.
In contrast, Apple gives actual sales figures for the iPhone, not units “shipped”. The iPhone 5 sold 5 Million to end users in the first 3 days, and that was in a limited number of countries before Apple expanded the distribution.
If, on the other hand, you were referring to “margins” as in “profit margins”, although Samsung has a lucrative business selling smartphones and tablets its profit margins are much lower than Apple’s on the iPhone and iPad. The majority of the profits from all smartphones sold worldwide are going to Apple.
There is a huge difference between “market share” and “profit share”. Anyone in business would be a lot less concerned about market share, and much more concerned about profit share.
The primary problem with using market share as a measure of business health is it provides no insight into the profitability of the product being sold.
John Kirk recently ran an article in which he asked and answered this simple question:
“Question: Company A has 25% market share and 75% profit share. Company Z has 75% market share and 25% profit share. Which company is doing better?
Answer: If you said anything other than company A, then you are dumber than a doorknob. Any intelligent person would take company A’s profit share over that of company Z’s market share.”

4:29 pm July 26, 2013

Henry 3 Dogg wrote:

Launch quarter for Galaxy S4 vs 3 quarters old iPhone 5

Show us the trailing 12 months.

Also, it looks like most of those S4s have only been sold into the chain. Not sold out to customers..

It could happen one day, but I very much doubt that it's happened yet.

4:33 pm July 26, 2013

John Clayton wrote:

Is Strategy Analytics Samsung's PR firm?

4:41 pm July 26, 2013

Josef wrote:

Sorry for my bad english....I think, that the comment from Sam is the best Analyse which I have seen in last MONTHS !! There is nothing more to say !

4:41 pm July 26, 2013

DK wrote:

31 million iPhones! Boom! Wait wait wait next quarter we will see iPhones sales drop off. It's always the next quarter for the people saying Apple is doomed. Looks like to me that Apple has the worlds most popular phone at the perfect size. Why else would they be flying off shelves!!!!!

4:41 pm July 26, 2013

Anonymous wrote:

Look @ Benedict Evans tweet-
samsung profit- 5.6bn, apple-9.2bn, i believe both are pre-tax.
you cannot breakdown iphone profits- how do u know the exact costs, there is iphone division, it is total company profits.

4:43 pm July 26, 2013

samesung wrote:

how do you know iphone costs, it is not a division.

4:46 pm July 26, 2013

samesung wrote:

this is a pure lie

4:59 pm July 26, 2013

Radnuker wrote:

Yeah, I'm canceling my WSJ subscription. I'm tired of their totally biased anti-Apple reporting. Why do I pay $21+ a month to a publication that seems to purposefully manipulate data to tell the story they want to tell rather than what is really going on.

5:06 pm July 26, 2013

Thompson wrote:

How strange: why is it that people groan about iPhone's profit MARGIN falling to something Samsung could only dream of, but when comparing profit between the two, Samsung's pathetic margins are not mentioned.

Answer: any way to express stats in which Apple seems in trouble is what the press picks.

5:09 pm July 26, 2013

Foxtrot Alpha wrote:

Another hackery masquerading as journalism from WSJ. This is why I stopped my WSJ subscription about a year ago.

5:19 pm July 26, 2013

Anonymous wrote:

Well, didn't Samsung raise the prices of the ARM processors they make for Apple since Apple started buying other components from other vendors? Maybe that's what is causing their increase profits.

5:21 pm July 26, 2013

Kelvin wrote:

"...any way to express stats in which Apple seems in trouble is what the press picks..."

How true... let's all play a game on picking Apple shall we?

Let's suppose Samsung reported a fantastic quarter with rapid smartphone growth. Of course, this would indicate that Apple is in trouble because Samsung is taking all of the market share away from Apple.

Now, let's suppose Samsung reported a disappointing and lousy quarter for their smartphone growth. This would indicate that the global smartphone market is saturated and therefore there will be no more room for Apple to grow.

As you can see, regardless of what Samsung reports on their smartphone growth is irrelevant, Apple is screwed either way. Perhaps these numbnuts should more direct and simply say Apple is screwed no matter what because they say so.

5:28 pm July 26, 2013

Chaka10 wrote:

Headline references "smartphones" while the article compared profits from "handsets".

7:47 pm July 26, 2013

Ed wrote:

WSJ is now the Phoenix of reporting

10:44 pm July 26, 2013

Woodie wrote:

More unbelievably shallow tech reporting from WSJ? Why am I not surprised?

5:46 am July 27, 2013

shm224 wrote:

@chaka10: that makes sense since most of handset profit comes from smartphones sales.

@rick: duh! Samsung's flagship smartphone GS3 came out in 2Q 2012, but Apple's profit surpassed Samsung. This is apparently is not true this time around. How about we wait and see Samsung's next 12 months?

5:53 am July 27, 2013

shm224 wrote:

This is hilarious. Look at all these PED's minions from tech fortune cnn com Apple 2.0 making Samsung-hate comments and attacking WSJ journalism here. Seriously, you basement dwellers, don't you have anything better to do than chasing after Apple-Samsung articles all day long?

6:01 am July 27, 2013

shm224 wrote:

@sam (aka, spakkal): you go around copy-and-paste the same card-stacking arguments all over the web -- while failing to make a single cohesive fact-based argument. But allow me succinctly sum it up for you:

Apple is running out steam. Samsung is about choice. It's not about market/profit share, but their growth rate -- and Apple is losing that battle.

@Anonymous: Samsung denied the rumored price-hike. It's also rumored that Samsung LSI profit (mainly from Apple) is lower than that of other component divisions.

6:29 am July 27, 2013

shm224 wrote:

@Thompson: don't worry, Apple's margin will fall even further. At this rate, Apple's margin will eventually converge to Samsung's rate in some foreseeable future.

11:37 am July 27, 2013

RI Waterman wrote:

Does anyone have a breakdown of all the so-called "smartphones" that are sold by Samsung and included in this list of sales?

I think many Android powered smartphones are really higher level feature phones that are not designed as and definitely not used as smartphones.

1:05 pm July 27, 2013

DED wrote:

Samsung Electronics didn't earn more than Apple, so Strategy Analytics had to fudge some numbers. It took half of Apple's profits (based on the fact that half of its earnings are reported to be from iPhone sales) and 2/3rs of Samsung's (because that's the proportion of its mobile sales).

Because Samsung doesn't make anything on tablets, SA thinks this is fair. But it's not a real or informative comparison of any sort. It's just a gerrymandered nonsense to generate a sensational headline.

The real news is the Samsung has been warning all year that its smartphone sales are slowing, and that SA is comparing the launch quarter of Samsung's Galaxy S4 with the third, slowest quarter of Apple's iPhone 5, which is still outselling every other phone.

But this sort of fake news is exactly what Android fans want to hear, so let's let them be entertained by it and surprised when, once again, Apple's next launch blows the competition out of the water.

7:58 pm July 27, 2013

jbelkin wrote:

Pure speculation and conjecture - Samsung has NEVER announced any quarterly sales of phones so this "analyst" says it is so so it is - no analyst has ever been wrong? They can't even guess how many phones Apple sells UNTIL APPLE ANNOUNCES it EVERY QUARTER. This is NOT news, this is a press release run as actual news - has Samsung commented on this as to its accuracy?

11:11 am July 28, 2013

shm224 wrote:

@DED: there is not much to fudge since non-mobile devices sales/profit at Samsung's IM division is miniscule.

Samsung was warning against their own projected sales (500M for 2013) they had made earlier. Samsung also announced that they shipped twice as many flagship phones GS4 during the same time frame. Samsung's mobile devices YoY sales growth 40% likewise triumphed Apple's 20%.

Wah, Wah, cry me a river.

11:32 am July 28, 2013

shm224 wrote:

@RI Waterman: no company as far as I know publishes a sales breakdown by models, although most mobile makers have a lot fewer models than Samsung. The only time we will know about such a breakdown is after a lawsuit -- we had a glimpse of Samsung's smartphone sales by models in 2010 last August in San Jose.

11:34 am July 28, 2013

shm224 wrote:

@ jbelkin : Well, Samsung mobile devices are made by Samsung's IM, Internet Mobile, division. While the division also handles laptop, tablets, etc, most of its sales, and most importantly profit, comes exclusively from smartphones sales.

So SA's estimate isn't all that far off.

4:34 pm July 28, 2013

Anonymous wrote:

There are a lot of great lines in Eran Dilger's article, this is one of my favorites:

"With Samsung sending out distress signals about the sustainability of its high volume, low quality business model for phones in a market where Apple continues to grow, Strategy Analytics' creative accounting designed to award Samsung with a contrived achievement appears to be a distraction from reality, rather than real information."

The question becomes, is Strategy Analytics just incompetent and really lousy at their jobs, or pathological liars? The facts show it's both.

5:16 pm July 28, 2013

frank wrote:

50% of which are returned within 14 days. However the camera is terrific.

This nonsense has been disproved repeatedly. Shame on the Wall Street journal for allowing it to be repeated again.

4:09 pm July 29, 2013

Sam L wrote:

According to another source strategic analytics "estimates" are way off.
What ever happened to fact checking?
sam L

4:11 pm July 29, 2013

RadarTheKat wrote:

Come on guys! Even the Wall st. Journal now? Can't anyone at this supposedly prestigious publication even flip their browser over to AppleInsider.com and read the excellent refutation of this totally misleading and error-prone notion regarding Samsung versus Apple handset profit share? It's not like you have to jump on a plane and fly somewhere to get the scoop like 40 years ago. AppleInsider.com is literally click away and you'll be staring at the facts. Really WSJ? Really?!!!

4:12 pm July 29, 2013

Anonymous wrote:

Another example of incompetent analysis published by Strategy Analytics to generate clicks, and lazy journalists picking up anything on Apple and spreading lies without any sort of due diligence. Daniel Eran Dilger has detailed analysis on how SA made various outlandish calculation and false assumptions and named all the lazy journalists who regurgitated SA's statement. The list goes on and on...PC Mag, Forbes, CNET, Gigaom, CNBC, BBC News...sad day for journalistic integrity.

4:33 pm July 29, 2013

Anonymous wrote:

It is a LIE. Check your facts bozo. You are one of many schlock bloggers, certainly not worthy of reporting factual news. You are NOT a journalist.

4:35 pm July 29, 2013

Anyus wrote:

One it's a sell squarer and wht about yearly profit earns. Samsung still hasten rout sold the iPhone. Or even the iPod. Put together all those and you see. That samsung still is behindhde in sales. And samsung sells TV ovens washers dryers while apple sell eltronics so how can you compare the two. Dumasses

4:47 pm July 29, 2013

Snoof wrote:

Looks like shm24 is trolling for Samsung just like this article.

10:28 pm July 29, 2013

Joe wrote:

Apple's profits continue to shrink quarter after quarter. Now it has to launch a "Cheaper" version of the iphone to compete. This company is going downhill quickly. Selling more iphone 4 and 4s phones to compete? Have fun running iOS7 on those phones. Maybe in a "Compatibility Mode". New purchasers of these "Old" phones will be upset when iOS7 comes out. Think about it. Buyer’s remorse coming up! Have fun selling this one to a new customer.

3:01 am July 30, 2013

Darren wrote:

Many people trust and rely on the WSJ so it is unfortunate when they simply repeat what others have reported without checking facts or doing their own analysis. The Strategy Analytics guesswork was clearly wrong as their estimates simply took half of Apple's operating profits and divided by 2 (since iPhone makes up about 50%) of sales. It is widely known that iPhone profit margins are significantly higher than all other Apple products so this estimate is not accurate. Furthermore, Samsung's profits were for a division which included other products such as PCs and tablets. Appleinsider did a complete and thorough job of digging into the financial facts that were reported by each company to expose the misleading headlines that this analysis led to. WSJ - I would encourage you to review this analysis and to do your own estimates as I don't think you will agree with the numbers that SA came to.

10:53 am August 2, 2013

http://www.foakleysq3.com wrote:

It's a beautiful hue to look through.

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